All trading involves risk. Losses can exceed deposits.

Stocks in red for a third day

In London, equities are offside for a third consecutive day as dealers find no reasons to go long.

All trading involves risk. Losses can exceed deposits.

European markets lost on average over 1% yesterday as the European Central Bank (ECB) was brought before the German Constitutional Court for a hearing in relation to their bond-buying operation. The ECB supported the sovereign debt markets during the crisis in order to bring stability to the region; the court hearing will determine whether the bond-buying scheme put in place was legal or not. Today is the second day of the hearing, and traders are unwilling to buy back into the market in case the ruling goes against the ECB.

Overnight, Japanese equities finished a touch lower after the country announced that core machinery orders dropped 8.8% in April compared with March. This is the first drop in three months, which has spooked the Asian markets.

Online retailer ASOS announced a 45% rise in quarterly sales year-on-year; sales were strong in both the UK and international divisions. The share price is consequently up 3.5%.

The UK announced a slight drop in the number of people claiming unemployment benefit; this has provided a small boost to UK equities.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.